EnACT
Using Microfinancing to Reduce Inequities
Document Type
Presentation
Type
EnACT
UN Sustainable Development Goal
UNSDG #10: Reduced Inequalities
Start Date
27-4-2022 9:30 AM
End Date
27-4-2022 9:50 AM
Abstract
We are focusing on UNSDG 10, reduced inequalities, and specifically for us, economic inequalities. Reducing inequalities at all levels is crucial for ensuring a decent and improving quality of life for all people. According to the German Socioeconomic Panel, during the decade following German Reunification, as incomes in former East Germany began to catch up to West German levels, so did East Germans’ subjective satisfaction with life, household income, work, and dwelling. (1) More qualitatively, studies in China have shown that people who live with high levels of inequality fare worse in terms of health-related quality of life than those who live with less severe inequality. (2, 3) To help alleviate inequalities in our own communities, we propose the use of microfinancing. Microfinancing is a financial service that caters to people with low incomes, often including small loans. While it is often associated with the developing world, microfinancing can still be helpful to those living in poor living conditions due to inequality in the “developed” world. According to Business News Daily, it “helps aspiring entrepreneurs generate income, build assets, manage risks and meet their household needs.” The goal is for those who take out these small loans to be able to build their incomes and assets so that someday they can move on to traditional banking as they rise up from their socioeconomic stratum. (4) In our community, we could raise funds to spend as loans for people to do things such as attend training for job searching or just applying for jobs. When these people hopefully secure those jobs, the loan could be paid back with an appropriate amount of interest.
Using Microfinancing to Reduce Inequities
We are focusing on UNSDG 10, reduced inequalities, and specifically for us, economic inequalities. Reducing inequalities at all levels is crucial for ensuring a decent and improving quality of life for all people. According to the German Socioeconomic Panel, during the decade following German Reunification, as incomes in former East Germany began to catch up to West German levels, so did East Germans’ subjective satisfaction with life, household income, work, and dwelling. (1) More qualitatively, studies in China have shown that people who live with high levels of inequality fare worse in terms of health-related quality of life than those who live with less severe inequality. (2, 3) To help alleviate inequalities in our own communities, we propose the use of microfinancing. Microfinancing is a financial service that caters to people with low incomes, often including small loans. While it is often associated with the developing world, microfinancing can still be helpful to those living in poor living conditions due to inequality in the “developed” world. According to Business News Daily, it “helps aspiring entrepreneurs generate income, build assets, manage risks and meet their household needs.” The goal is for those who take out these small loans to be able to build their incomes and assets so that someday they can move on to traditional banking as they rise up from their socioeconomic stratum. (4) In our community, we could raise funds to spend as loans for people to do things such as attend training for job searching or just applying for jobs. When these people hopefully secure those jobs, the loan could be paid back with an appropriate amount of interest.